Musk v. Altman Evidence Shows What Microsoft Executives Thought of OpenAI

New evidence from the Musk v. Altman trial shows Microsoft executives had serious reservations about further investing in OpenAI in 2017-2018, long before the partnership became one of tech's most lucrative deals. Emails between CEO Satya Nadella and 15 executives detail their skepticism: they saw OpenAI's gaming AI demos as unimpressive, believed Microsoft's own research was more advanced, and calculated a $150 million potential loss on required cloud credits. Nadella himself wrote, "I can't tell what research they are doing," while Jason Zander, EVP of Azure, suggested passing unless OpenAI could directly benefit Microsoft's business. The fear of losing OpenAI to Amazon—then the dominant cloud provider—kept discussions alive.

Despite initial reluctance, Microsoft eventually committed $1 billion in 2019 after OpenAI created a for-profit arm that promised a potential $20 billion return. The emails show the partnership was nearly killed multiple times: Xbox couldn't commit $35-50 million for a gaming AI license, and the company planned to cut off discounts by March 2018. Only a final push from Nadella, driven by Elon Musk's claims of imminent AGI breakthroughs, kept the door open. The trial continues to reveal the fragile origins of what became a transformative alliance, highlighting how corporate risk assessment nearly derailed one of the biggest bets in AI history.